Can we say that Holiday pay covers hours worked on the holiday, if people who do not work recieve holiday pay as well?

UPDATED: Sep 30, 2022

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Can we say that Holiday pay covers hours worked on the holiday, if people who do not work recieve holiday pay as well?

My company considers Labor day a paid holiday. Any employee who has been with us for 90 days or more receives their full day’s pay. If nonexempt employee’s choose to work on labor day can we say that the holiday pay covers their hours worked? Or must we pay them on top of the holiday pay that everyone will receive? We are in AZ and CO. Thank you.

Asked on July 24, 2017 under Employment Labor Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The law does not require holiday pay at all; that is voluntary on the part of the employer. So the law does not directly address the issue of when employees are entitled to holiday pay (since, being voluntary, it is determined by the policy the employer chooses to put in place), but it does say that hourly employees must be paid for all hours worked, even if it is not during normal workdays or shifts (there is no need to pay nonexempt salaried staff for working other than their normal hours, days, or shifts; their weekly salary takes care of all their work during the week, other than overtime if they work more than 40 hours per week--nonexempt salaried staff are entitled to an overtime premium when working in excess of 40 hours per week).
If you have a written policy about who gets holiday pay and when, you have to follow it. If you don't have a written policy, you can use this opportunity to make a policy, since in the absence of a written policy or employment contract, an employer can make or change policies at will. Since you *must* under the law pay an hourly employee for all time he or she works, even on holidays, you would have to decide if on top of that you want to pay them holiday pay: you could, in the absence of a written agreement or policy, decide to not provide holiday pay to someone who works that day, or to maybe pay them a reduced amount (e.g. if you work that day, you get 1/2 the standard holiday pay, so you are earning 1.5 times normal pay for the day).

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